AMC Entertainment movie theater chain (AMC) fell in trading today and data shows that short sellers are likely closing in. The struggling company hasn’t seen much upward mobility over the past year since the brief meme stock rally of may 2024.
In fact, the stock is currently 30% less so far this year. This poor performance appears to be prompting short sellers to bet against meme stocks as it continues a downward trend.
Brief analysis platform data. Fintel shows that short interest currently represents 17% of AMC stock’s float. Furthermore, short sellers would need more than 12 days to cover their positions. The clear conclusion is that bearish energy increases as stocks fall.
What’s happening with AMC stock?
After an initial burst in today’s trading, AMC stock gradually fell 1.61% and appears poised to continue sinking deeper into the red. This may not seem like too poor a performance at first glance, but the fact that AMC has fallen more than 50% over the past year should remind investors that the company is showing constant instability.
If growing interest from short sellers is any indication, stocks are likely to continue falling as the year comes to a close. AMC’s problems are probably not specific to its industry. Associated cinema chain Cinemark (CNK) has enjoyed an excellent year, increasing 83%while AMC shares have been sinking.
Additionally, short sellers don’t seem as focused on fellow meme stock Gamestop. (GME) like they do on AMC. Short-term interest represents only 9% of GME’s float. This makes sense, as GME has outperformed AMC during the year with profits of 54%. The short interest in it is quite high, but still lower than AMC’s 17%.
Is there any hope for AMC stock?
Overall, it definitely looks like short sellers are increasing their bets against AMC stock. This makes sense, as Wall Street remains largely bearish on the matter. Analysts maintain a moderate sell consensus on the matter based on zero buys, three holds and three sells over the past three months. Furthermore, the AMC average price target of $4.80 represents a 12.54% change from current levels.
From short sellers to Wall Street analysts, it’s clear that many people are not optimistic about AMC’s growth prospects. Bernard Zambonin, TipRanks Contributor I recently compared it to Gamestop and Trump Media & Technology Group (DJT)pointing to AMC as the worst bet of the three meme stocks. The growing short interest in AMC indicates that this bearish thesis is gaining momentum.
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